OFFICIAL DISPATCH

ON SEVERANCE ALLOWANCE FOR LABORS WHEN TERMINATING LABOR CONTRACTS

On answering the Official Dispatch No. 72/CV/NTNT dated July 19, 2011 of the Nam Thanh Ninh Thuan Manufacture and Trade - Construction Limited Liability Company on on severance allowance for labors when terminating labor contracts, the Ministry of Labor, War Invalids and Social Affairs has opinions as follows:

1. At the regulations at clause 1, Article 14 of the Decree No. 44/2003/ND-CP dated May 09, 2003 of the Government detailing and guiding the implementation of a number of articles of the Labor Code regarding labor contracts, the following cases of terminating labor contracts shall not be provided with severance allowances:

a) In cases where labor contracts are terminated under the provisions at Points (a) and (b) of Clause 1, Article 85 of the Labor Code. b) In cases where labor contracts are terminated to retire and enjoy the monthly pension regime prescribed in Article 145 of the Labor Contract.

c) In cases where labor contracts are terminated under the provisions in Clause 1, Article 17 of the Labor Code and Article 31 of the amended and supplemented Labor Code.

d) In cases where laborers terminate their labor contracts in contravention of law, as prescribed in Clause 2, Article 41 of the amended and supplemented Labor Code.

2. At the sub-clause (b), clause 2, Section III of the Circular 21/2003/TT-BLDTBXH dated September 22, 2003 of the Ministry Of Labour, War Invalids And Social Affairs regulating that the employees leaving their jobs to enjoy the monthly pension regime as stipulated in clause 1 and clause 2 of Article 145 of the Labor Code are not paid severance allowances.

Therefore, current legal regulations does not regulated that labors terminate labor contracts right to the current regulations and receive onetime social insurance allowance regime for not having full conditions to enjoy monthly pension regime (in accordance with clause 3, Article 145 of the Labor Code) will not be paid severance allowances. So employers will be responsible for paying severance allowances to labors in accordance with regulations for these cases. The specific calculation solutions for severance allowances shall be implemented in accordance with regulations at the Decree No. 43/2003/ND-CP and the Circular 17/2009/TT-BLDTBXH dated May 26, 2009 of the Ministry of Labor, War Invalids and Social Affairs.

The Ministry of Labor, War Invalids and Social Affairs answer Company for information and implementation./.